What’s Behind the Building Booms?

The White Castle treesit in Oregon continues to stoke controversy surrounding state repression of peaceful movements, as the Bureau of Land Management (BLM) and local representatives debate how to proceed with greenwashed timber sales. At stake is 187 acre clearcut in the old growth spotted owl habitat, which is being billed as a brand new type of ecologically sustainable timber sale.

According to Cascadia Forest Defenders (CFD), “A ‘Variable Retention Harvest’ (VRH), as far as we can tell, is the new code for clearcut that is proposed on Bureau of Land Management land in Oregon. VRH clearcuts 70% of a forest leaving the remaining 30% in little scattered patches.”

Advocates of the Variable Retention Harvest insist that the old growth have been crowding out the space for new growth to appear, so the Bureau of Land Management needs to create “artificial meadows.” Ron Wyden and Peter Defazio are sponsoring a bill in federal legislature that would privatize Oregon and California lands, currently managed by the BLM, in checkerboard fashion, using this ecological perspective as a reason to clearcut older areas of forest.

Activists have pointed to a recent study explaining the ecological vitality of old growth as evidence that the Wyden and Defazio approach lacks scientific credibility, yet some Oregon lawmakers insist that protestors who are holding up the timber sale by treesitting ought to be prosecuted.

According to a statement made last week by State Rep. Tim Freeman, R-Roseburg, “The fact that you have, and I will call them terrorists, going out and stopping a public process and timber operations, I think it should be a crime.”

The organization responsible for the treesit, CFD has filed an appeal that the BLM is currently processing by February, so it is clear that the protestors are following public process—it is the timber company and the BLM who want to clearcut the forest before the appropriate channels have been cleared. This situation is nothing new; only a few months ago, timber companies closed in on the Jazz timber sale on Mount Hood while local biodiversity group Bark were contesting the sale in court.

By insisting that activists protesting a timber sale ought to be prosecuted, Freeman is referring to a defeated bill that almost passed the Oregon legislature last year making it a crime to peacefully and nonviolently disrupt a timber sale on state lands, and forcing protestors to pay corporations for financial damages caused by lost profits.
Because the White Castle timber sale is on O&C land, not state land, Freeman and his gang are calling for a federal bill to match a local bill that would prosecute forest defenders. The Scott Timber Co. has leased the land at White Castle for over $1.3 million, and protestors have held them at bay by blocking access to a logging road since June. Since the Sheriff does not have jurisdiction to evict the treesit, and the BLM lacks the resources, the stalemate continues.

Paradoxes of Logging and Building

The expansion of logging into O&C lands with checkerboard clearcutting as a main objective is reminiscent of the programs that attacked roadless areas in the 1980s under Reagan’s Secretary of the Interior James Watt. Under the Obama Administration, the Forest Service has called for a 20 percent increase in logging.

It is often noted, in the critique of Obama’s “extractivist” agenda surrounding the exploitation of natural resource, that much of the increased logging (around 70 percent) in the Pacific Northwest is exported to East Asia, where it has fueled various “building booms.” Less discussed is the possibility that the federally mandated increase in logging is keeping domestic timber prices “unnaturally low,” paradoxically assisting a new “building boom” and “housing market recovery” in the US.

It is strange, indeed, that construction of single-family homes increased to a rate highest in five years late last year, and that apartment construction rose even more quickly. The international WOOD index has risen rapidly over the past 3 years, yet in the US prices of timber has dropped remarkably during the so-called “building boom.” Timber companies are already given subsides to build logging roads, and the federal government is known to pay out more for roads than it receives for the lease of land. Thus, timber prices in the US are already situated in what could be called an overly-friendly business climate. But for US markets, low timber prices can mean a glut in supply, and often portend a decline in building, which suggests that today’s increase in building is largely driven by the finance industry in a somewhat anomalous situation—ie, escalation of the accumulation of capital.

The building boom lies in the South and Midwest—where institutional investors are most active. In Florida, land of development and despair, institutional investors make up seven out of ten home sales; four out of ten in crisis-ridden cities like Atlanta. Imara Jones’s observations in March 2013, “Wall Street is flipping homes into rental properties and then leasing them to the very people they pushed and priced out of the real estate market,” could thus be thought of today in terms not only of flipping, but of developing.

Development on the Global Stage

Other large economies are encountering “building booms” with different outcomes as urban populations rise throughout the world.

In China, a building bubble was brought on by the encouragement of massive investment. But China has rapidly built up cities in advance of a rising urban population, such that today experts insist that the boom is facing a painful decline. Industries that worked to develop the building boom, such as manufacturers of cranes and building equipment, have sought to compensate for the decline by buying up foreign corporations and investing abroad, for example in Brazil, but the strategy is underwhelming.

Brazil, itself, has rankled the US by increasing tariffs on machinery, plastics, and steel in order to encourage its internal extractive, manufacturing, and construction industries during what has been a meteoric rise of the housing market sector. According to Robert Shiller, who predicted the collapse of the US housing market in 2005, however, Brazil is in danger of the next big housing bubble. Brazil’s development appears to be bolstered by infrastructure building, the World Cup this year, and the Olympics coming up in 2016, but these projects are roundly unpopular with broad sectors of the population.

Indeed, part of the reason for the Sochi Olympics is to attract investment to the region of Eurasia where Russia wants to develop the most—a perimeter of around 450 miles around Sochi and Volgograd (Sverdlovsk region, Belgorod region, and Krasnodar Krai). The tragic blasts in Volgograd have thus proven costly, instantly shaking the ruble while leaving stocks relatively unaffected. (Bombing a train station and killing innocent people in order to damage the society and economy of a place seems more of an apposite example of terrorism than sitting in a tree to block logging.)

Shocks to the ruble are taken very seriously by Putin, who is seeking to encourage investment in a climate international financial institutions have ranked as BBB, the second to lowest investment grade.

As opposed to the US, where banks are benefitting from timber industry expansion, and China, which found investment before hitting a decline, Russia has a timber industry that is working at a fraction of capacity, because the investor side is not there. The Russian Federation has attempted, under Putin, to stoke development through low mortgage rates and subsides, and even brought in Goldman Sachs last year as an advisor. Yet Russia maintains its place as the 132nd best country to invest in—behind Albania (124th), Botswana (50th), and Peru (20th).

In light of these and other examples of countries currently working and around in the conditions of building booms and bubbles, the US economy seems to be developing in precarious ways. While the US relies on maximum resource extraction for development of a rentier nation controlled by the 1 percent, the elites everywhere are building fortresses of matchsticks out of a new global economy marked by “neoliberalism with Southern characteristics” and a tottering North Atlantic.

Alexander Reid Ross is a co-founding moderator of the Earth First! Newswire and editor of the forthcoming anthology Grabbing Back: Articles Against the Global Land Grab (AK Press 2014). He is also a contributor to Life During Wartime: Resisting Counterinsurgency (AK Press 2013).